The fact that it's sold well over a million copies shows there's interest in the product. I'll admit I and many others, over-hyped it a bit. But It's important to realize that Labo's much more niche than something like Brain Age, or Wii Sports, or even Nintendogs. It's large, fairly expensive, and requires a lot of free time and creativity to leverage. It's not for everyone, and has a very different sales expectation to it than any other first party game on the system, which Nintendo themselves has acknowledged multiple times. That's why even at just 1 million fy sales, they're still going to keep rolling with it with new kits and events.

You seem to want to believe this delusion that the Switch is strictly a hardcore gamer console that only the l33t hardcore gamers play, with the filthy casuals banished to smartphones. The reality is, that's not the case. The gaming industry's not as linear and one-dimensional as you like to make it appear. Audiences from different markets can cross over, and Nintendo is going to be focusing on that. You can ignore all the data I brought up from Nintendo themselves in their reports, but facts are facts. 

Nintendo's almost always upfront about the commercial reception of their products. If something under-performs, they always come out and say it. Like With Wii Music, and Wii U for example. Nintendo never banked on Labo selling Switches. Some people (myself included) may have thought that at first, but the more Nintendo's talked about it, it became clear it was never the plan.

Besides, it's not a failure, it sold over a million and Nintendo said that it did as well as they expected it to. So now their goal is to continue building on it to be a long-term product. 

It has a million only because retailers over-ordered them thinking Nintendo was pushing a hit. My Best Buy has a pile of unsold boxes sitting there collecting dust, I believe the original shipment in Japan hasn't even sold through yet. 

You overhyped it a "bit"? You were comparing it to a game franchise that sold like 25-30 million copies, lol. You whiffed on that big time dude. 

I'm not saying Nintendo's audience is HARDCORE BLOOD TITS GUNS audience, it has evolved past 2007 to something new itself, it's a majority adult massive legion of people that have grown up with Nintendo in the 80s, 90s, 2000s, 2010s. We're now nearly in 2020. The amount of people who are Nintendo fans today is monstrous, and they're not little kids that need to rely on mommy/daddy to buy them every game. 

The whole "Nintendo is for babyiez you shouldn't like it becuz your 25 dooood" stigma is over, today's generation doesn't really think like that. Like I said it's the same thing that happened in comics, once upon a time Spider-Man, Captain America were "kids shit" that you were supposed to grow out of. Today it's a multi-billion dollar business driven largely by adults. 

Time's change. Nintendo today has an audience behind it where they can be just Nintendo and not have to be a dancing monkey for casuals that don't really care much for games. They can be themselves today and not be locked into a tiny 20-30 million audience, today it's 100+ million. 

Actually, Labo already sold through its original shipment by the end of last year in Japan. Retailers there have just recently ordered more. The facts still remain, Labo sold well for its first year, and Nintendo will march forward with it whether you like it or not. Also, local store sheves are not a good indicator for a game's success. My local Best Buy had stacks of unsold Smash Bros. Ultimate copies, that game surely must've been a flop /s.

Yes, I was part of the crowd who expected this thing to be an instant phenomenon. But that was mostly personal hype talking. It was only after learning and reading about Nintendo's intentions for it that I adjusted expectations accordingly. Still doesn't change the fact that it did well. 

Adults do have a lot of buying power, but adults aren't all hardcore gamers. The Switch appeals to a wide array of consumers regardless of age, taste and gaming experience. 

"The retailers sold their initial shipment 8 months after the release" is exactly the definition of a flop. Initial shipment is supposed to be the initial sales, not the first year sales. You can say that the numbers are not that bad, but the fact that they sold in 8 months (after price cut) what they expected to sell in the first weeks shows enough.

And Nintendo pushed Labo a lot in Japan, at launch you couldn't go anywhere without seeing it, and you had special staff in the stores to hype it and push people to try it. Even for months after launch, you had a huge ad for it in Akihabara (maybe it's still there, didn't check lately). They put a lot of efforts and marketing into this thing, took 8 months and the holidays to sell the April launch shipment, and you think that "it sold as expected" and "It's pretty good"?

No. 

Only Nintendo said that Labo's success isn't defined by first week sales. Ever since they announced it, they continued to stress that Labo is a long term product with a different sales trajectory. I imagine they made this clear to retailers as well. Not only is it still at the same price, but retailers recently ordered more shipments for 2019. So it's selling well enough to keep going. 

Labo is a very different type of product from your typical Switch game, which are expected to do most of their sales in the first few weeks. Nintendo said this numerous times, and still hasn't said otherwise.

These aren't my opinions. It came straight from the horse's mouth. 

"Nintendo Labo has been positively received as a “Nintendo-like” product since its announcement nearly one year ago. Sales of the three Nintendo Labo kits totaled over 1 million units worldwide as of the end of 2018. Before the first kits launched last April, we expected sales and consumer reception to be different from traditional video games like Mario or Zelda. Nintendo Labo has been incorporated into classes at 100 elementary schools across the US, and has received awards and acknowledgements from various domestic and international media, in categories of toys and of other general consumer products experiences. So, as we expected, it appears that Nintendo Labo has been accepted by our consumers differently than traditional video games."

Why anybody still insists it's a flop even after we have official confirmation that it isn't is beyond me. 

Where did you get this impression. Please cite sources.

If something under-performs badly, they just stop doing it. Like every other rational company in the world.

https://www.mcvuk.com/consoles/miyamoto-ponders-return-to-wii-music

https://www.kotaku.com.au/2009/02/iwata_wii_music_didnt_reach_potential-2/

"I think it sold lower than our expectations but on the other hand it was a really unique game." - Shigeru Miyamoto

They never said it was an outright failure, but this is a case where a big casual title fails to meet Nintendo's expectations with the company admitting as such. 

Besides, as a publicly traded entity, Nintendo is obligated to be honest about the commercial performance and sales expectations of big releases. They have to make it clear to investors what they expect from a title, and how well its met those expectations. 

I don't think Miyamoto has much to do with Nintendo's PR or their official press releases, but I could be wrong. Miyamoto basically says every game he likes is a failure from a sales perspective (StarFox, Pikmin, etc.) and it's usually because he takes these projects as his baby. At least from my understanding of it. I don't think he's as good a source as Nintendo's IR reports themselves.

Miyamoto is still on the Board though, so he obviously has access to all of Nintendo's sales data. Even outside of Miyamoto, Nintendo didn't hesitate to confirm that Wii U and Super Mario Run failed to meet expectations (outright bombing in Wii U's case). People like to say ARMS or Labo are failures, but really Nintendo hasn't admitted anything of the sort. And again, Nintendo's publicly traded nature forces them to be honest about the commercial reception of a major release.